Creation, Interaction and Expansion of Economic Systems

Creation, Interaction and Expansion of Economic Systems This theme includes:

Agricultural and pastoral production Trade and commerce Labor systems Industrialization Capitalism and Socialism

Foundations Unit8000 BCE – 600 CE

Neolithic Revolution

Traditional Economy Hunting and gathering Sedentary agriculture

developed between 10,000 and 8,000 BCE 1st developed in

southwestern Asia Earliest method was slash-

and-burn agriculture Subsistence agriculture

Herding animals (pastoralism)

Slash-and-burn agriculture in northeast India

Development of Agriculture

Economic Regions

Early Village Economy

Farming led to the rise of permanent villages Jericho

Village life led to specialized labor

Development of early industry Pottery, metallurgy, and

textiles

Ancient Civilizations

Mesopotamia, Egypt, & Indus River Valley Irrigation led to improved agriculture Development of cities contributed to rise of trade

China Regular rains & fertile soil minimized irrigation

Olmec Develop in rainforest; water control systems

Chavin Develop in mountains; complex irrigation

Nile-Indus Corridor

Pre-classical labor systems

Slavery Existed in all early civilizations but was relatively

unimportant Most slaves gained through military conquest

Egypt Used corvée labor to build pyramids & temples Peasants were bound to the land Men were organized into labor gangs of 50-100

Pre-classical labor systems

Mesopotamia Large number of slaves due to militaristic nature

of society Peasants lost their freedom over time

Rise of debt slavery

China Zhou dynasty peasants paid a percentage of their

crops to aristocrats in exchange for protection Manorial system

Classical Civilizations Han China

Monopolized production of iron, salt, and liquor Rise of the Silk Road

Mauryan India Ashoka built irrigation systems and roads to

promote trade Mayans

Terrace farming improved production of cotton, maize, and cacao

Classical Civilizations

Ancient Greece Cities, such as Athens, become centers of trade Economy depended heavily on slavery

Rome Latifundia – large landed estates focused on

commercial agriculture (olive oil, wine, wheat) North Africa was the major grain producing region

Depended on slave labor Roman roads promoted trade and linked empire

to Silk Road

Classical era labor systems

China Free peasants were the backbone of the labor force

Peasants ranked just below bureaucrats but above artisans and merchants

Qin Shi Huangdi ended the manorial system “Recruited” labor to build the Great Wall

Silk weaving supplemented farm income “Men as tiller, woman as weaver”

During the Han dynasty, slaves made up less than 1% of the total population

Classical era labor systems

Greece & Rome Slaves never constituted more than 50% of the

population Slaves worked as domestic servants, miners, and

farmers In Greece, slaves could serve as tutors In Rome, development of commercial agriculture led to

the rise of slavery Rome also used slaves as gladiators and chariot racers

Classical era labor systems

India Caste system was based largely on job

classification Farmers did not rank high in prestige Merchants had a higher social standing than they did in

China or the Mediterranean Slaves played almost no role in the economy

Sudras (lowest caste) and untouchables took the place of slaves

Post-Classical Unit600 – 1450

Creation, Interaction and Expansion of Economic Systems This theme includes:

Agricultural and pastoral production Trade and commerce Labor systems Industrialization Capitalism and Socialism

The Silk Roads

Cotton

Arabs

Did not rely heavily upon agriculture Abbasid sakk (checks) encouraged trade

Urbanization: Baghdad Dar al-Islam facilitated expansion of trade

Islamic law protected merchants Revival of the Silk Road Growth of Indian Ocean trade

Dhows increase the volume of maritime trade

Indian Ocean trade routes

East Africa

gold

salt

slaves

Arab dhow

Chinese junk

Labor in the Islamic World

Islamic slaves were viewed as humans rather than just property (chattel) Slavery was seen as a method of conversion

Slaves were acquired from Africa or central Asia

Abbasid introduced the use of Turkish slave-soldiers Mamluks Janissaries (Ottoman Empire)

Post-Classical Empires

Byzantine Empire Manufactures glassware, jewelry, & silk Trade a major part of the economy

Mediterranean Sea, Silk Roads, Russia, etc. Urbanization: Constantinople

Sudanic Africa (Ghana, Mali, Songhai) Trans-Saharan trade

Use camel caravans to trade gold, slaves, and ivory for horses, manufactured goods, and salt

Urbanization: Timbuktu

Trans-Saharan trade routes

Post-Classical Empires

Swahili Coast Trade gold and parts of exotic

animals to Islamic and Indian merchants for products from Persia, India, and China

Urbanization: Mogadishu, Kilwa, etc.

Great Zimbabwe Supplies gold to the Swahili

coast

Tang/Song China

Emphasis on internal trade Champa rice & terrace

farming Grand Canal & flying money

Song “pre-Industrial” era Commercial economy

focused on the production of silk, porcelain, & steel

Urbanization: Hangzhou

Post-Classical Empires

Mongols Pastoralists Promoted trade on Silk Road via Pax Mongolica

Marco Polo

Japan Villages relied on rice cultivation World’s leader in silver production

Trade silver to China for manufactured products Development of feudalism caused peasants to

become serfs

Medieval Europe Manorialism

Self-sufficient agricultural estates worked by serfs

Three-field system & moldboard plow

Trade revived after 1000 CE Rise of merchant & craft guilds Crusades led to an increase in

demand for Asian products Rise of Italian merchants & the

Hanseatic league Urbanization: Italian cities & Paris

Hanseatic League (1400s-1600s)

Post-Classical Empires Aztecs

Chinampas Pochteca monopolized long-

distance trade Tribute system

Inca Built 9,500 miles of roads to

facilitate trade Inca socialism Use terrace farming to grow

potatoes Mita labor

Early Modern Era1450 - 1750

Rise of World Trade European exploration

Seeking easier access to Asian luxury products Columbus discovery of the Americas Vasco da Gama reached India in 1498 Spain established Manila in 1571

Manila galleons connect Asian markets to American silver

Trade Empires Spain/Portugal in the 16th century Netherlands (Dutch) in the 17th century England (Great Britain) in the 18th century

European Colonization

World Trade after 1571

Dutch Trade Empire

Western Europe Commercial Revolution

Rise of a middle class (bourgeoisie) and proletariat

Mercantilism Rise of manufacturing Encouraged colonization

Joint Stock Companies Privately owned with government support Ex. Dutch East India Co., Royal African Co., Virginia

Company

Economy of New Spain

Encomiendas Manorial system in the New

World Declined with the death of the

natives Plantations

Majority of labor provided by African slaves

Economy of New Spain Mining

Silver “the Heart of the Empire” Largest mine was Potosi Mita labor

Haciendas Estates focused on cash crops &

livestock

Africa & the Slave Trade

Commercial relationship developed between West African kingdoms & Europe Triangle Trade or the Atlantic System

Slavery was common in Africa Slave Trade

Trade continued with Muslim merchants Increase demand caused by sugar plantations Atlantic slave trade altered traditional African

trade routes

African Slave Trade

Emancipation of Slaves

Ming Dynasty Economic Recovery

Rebuilt irrigation systems destroyed by the Mongols

Increased production of silk textiles & porcelain “Silver Sink”

Single-whip tax system Chinese demand for silver contributed to rise of

world trade Limited trade to Macao/Canton

Voyages of Zheng He

Established tributary relationships throughout the Indian Ocean Exchanged silk & porcelain for other

luxuries

Tokugawa Japan Portugal established trade relations in 1543 Trade silver to China in exchange for luxury

products 2nd in silver exports behind Spain

Began isolation in 1640s Allowed Dutch & Chinese to trade at Nagasaki

Urbanization led to rise of a merchant class

Russia Peter the Great modernized the economy

focused on mining and metallurgy Serfdom

Began under Mongol occupation Provided cheap labor for Russian agriculture Could be bought and sold

Mughal Empire

Continued manufacturing cotton textiles

British establish trading posts at Madras and Bombay in the early 1600s British East India

Company continued to expand their interests into the 1700s

The Modern Era1750-1914

Causes of the Industrial Revolution Favorable natural resources Population Pressure

Abundance of labor Growth of large manufacturing sector

Cottage industry (putting-out system) Advantages in world trade Technological innovation Government support of business

Industrial Technology Cottage Industry (putting-out system) Mechanization of weaving

Cotton that took an Indian worker 500 hours to spin took a machine in England 80 minutes to spin

Iron smelting Bessemer steel process

Energy Steam engine and electricity

Transportation Canals, steamboat, railroads

Economic Effects of Industrialization Labor changes

Factory labor was dangerous and toilsome Initially women & children work in factories Rise in white collar jobs for new middle class High unemployment rates Labor unions were formed to protect workers

Rise of consumer culture Standard of living increases Frequent economic depressions

Economic Effects of Industrialization New economic theories

Capitalism Direct attack on

mercantilism Positivism Socialism

The Communist Manifesto by Karl Marx and Friedrich Engels

Communism

Global Industrialization

Industrialization turned nations into either manufacturers of consumer goods or suppliers of raw materials

Manufacturers: Western Europe, the United States, Japan, Russia(?)

Suppliers: the Ottoman Empire, Egypt, China, India Africa, Latin America, Southeast Asia, Australia

Spread of Industrialization in Europe

Russian Industrialization

Caused by Russian defeat in Crimean War Abolish serfdom in 1861

Do NOT make major reforms to help peasants Limited industrialization

Trans-Siberian railroad Focus on heavy industry

2nd in petroleum and 4th in steel production by 1900 Do NOT produce consumer goods

Lower class women move to cities for factory work

Japanese Industrialization Ends isolation in 1853 Abolish samurai class Economic

modernization Industrialization Zaibatsu

Mitsubishi Women work in silk

factories

Africa: 1750-1914 British ended the slave trade in 1807; the

United States in 1808 England bans slavery in 1833; U.S. in 1863;

Natural resources (gold, ivory, palm oil) replace slaves in trade with Europe

Muhammad Ali modernizes Egypt Forced peasants to grow cotton for export Built irrigation canals and railroads Successors build the Suez Canal

Makes Egypt one of the most strategic places on Earth

The Middle East: 1750-1914 “Sick Man of Europe”

Declining agricultural revenues Large debts to foreign nations European imports exceed exports

Caused massive inflation

Reforms Creation of a central bank Factories opened in urban areas

Relied heavily on European investment and technology

Asia: 1750-1914 India

British transform India from supplier of textiles to exporter of raw cotton Also export opium, coffee, and tea

China Opium War ends Canton system

Opium trade reverses causes silver to flow from China Southeast Asia

British establish Singapore and colonize other areas to gain access to raw materials

Indentured Servitude Thousands of Indians, Chinese, and Japanese migrated to

the Caribbean to replace slave labor

The Americas: 1750-1914

Latin America supplied raw materials to the West in exchange for manufactured goods Influence switched from Spain to England Monroe Doctrine

Indentured servitude & immigration replace slavery

Mexico and Argentina undergo limited industrialization in the late 1800s Porfirio Diaz

The Twentieth Century1914 – Present

The West Great Depression

Causes German economic depression,

France & England unable to pay war debt; surplus in agriculture & industry; U.S. stock market crash (October 1929); U.S. bank failures

Effects Economic nationalism, expansion

of welfare state (New Deal in U.S.), increased government regulation of the economy; political radicalization

The West: Post-WWII Transition from secondary economy (industrial)

to a tertiary economy (service) Growth of white-collar jobs

Expansion of the welfare state Economic cooperation

European Economic Community (eventually EU) IMF and World Bank

Multinational corporations Volkswagon built cars in Mexico for U.S. consumers

Eastern Europe Russia

New Economic Policy Lenin’s response to the Great Depression; minimal impact

Collectivization of agriculture Five-Year Plans

Command Economy

Latin America Export raw materials (crops, rubber, etc.) for

manufactured goods Industry dominated by Europe Great Depression had major impact

Exports fell by over 65%

Import Substitution Industrialization Attempts at economic nationalization was

often opposed by the U.S. NAFTA

Africa Export raw materials (cocoa, palm oil, gold,

etc.) for manufactured goods Colonial rulers often forced Africans to work in

mines or on plantations Post-Independence

Debt Emerging markets

Low GDP with opportunity for economic growth Violence over resources

Conflict diamonds

The Middle East Post-Independence

Often remained dependent upon trade with Europe

Impact of oil economy OPEC Allowed nations to gain tremendous wealth

Many countries have used oil wealth to invest in other industries Ford, Citicorp, AIG, etc.

East Asia Japan, Inc.

Government works closely with business Little Tigers

South Korea – steel, automobiles, etc. Taiwan – textiles then computers Hong Kong – textiles then banking Singapore – shipping

China Five-years plans & collectivization under Mao Four modernizations under Deng Xiaoping

Semi-autonomous regions